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The person you're replying to isn't talking about the housing market collapse. The credit crunch that happened after was the much bigger threat to the global ec
by nonameiguess 5y ago
The person you're replying to isn't talking about the housing market collapse. The credit crunch that happened after was the much bigger threat to the global economy, and that was entirely caused by businesses operating with zero cash due to the assumption that commercial paper and other types of short-turnaround overnight loans were close to risk free even though they were not.
- CryptoPunk 5y agoThe housing market collapse is the reason for the misassessment of risk, and the over-extension of credit. Mortgage-backed securities were considered AAA assets, which is why so little in cash reserves were maintained. >>Had Tether been around in '08, it would have been accumulating hordes of that stuff to back itself up. That's irrelevant, because every one, including regulators, would have considered that adequate collateral. There was a systemic misassessment, due to the systemic impact that government intervention had on the housing and sub-prime mortgage market.
- JumpCrisscross 5y ago> Mortgage-backed securities were considered AAA assets, which is why so little in cash reserves were maintained That's fine and irrelevant. Had Tether been around in '08, it would have been accumulating hordes of that stuff to back itself up.